In the late 1800s, one of Mumbai’s prominent business families found itself headed by a woman. Farah (Flora) Sassoon (née Abraham), a widow and mother of three, successfully ran the global business interests of David Sassoon & Co. for six years before her uncles conspired to oust her.
Rivalry is not unheard of in big business families. But the saga of the Sassoons, across four generations, packs in quite a few lessons for business families and entrepreneurs even today, suggests Joseph Sassoon, a descendant of the family. His new book, The Global Merchants: The Enterprise And Extravagance Of The Sassoon Dynasty, chronicles the family.
David Sassoon, a Jewish Baghdadi trader who came to India in search of opportunities in 1832, had built an empire by the mid-19th century. Known as “the Rothschilds of the East”, the family’s business spanned Shanghai and London. Starting by trading in commodities like tea, silk, indigo dye, rice and pearls, the family was soon dominating a large portion of the opium and cotton markets.
Though the business remained headquartered in Mumbai, where David Sassoon lived till his death, he sent his eldest son, Abdallah (aka Sir Albert), to England and his second son, Elias (who later set up ED Sassoon ), to China to expand the business. Two events in 1858 were instrumental in supercharging the family’s fortunes: Opium was legalised in China and the British government took control of India, opening up trade. The Sassoons seized the commercial opportunities.
Joseph Sassoon, a professor of history and political economy and director of the Center for Contemporary Arab Studies at Georgetown University, US, argues that Farah, David’s granddaughter, may well have been the first woman CEO to head a global company. Washington, DC-based Sassoon, who visited Mumbai for the Godrej Archive’s annual lecture in March, speaks to Lounge on Zoom about the dynasty, and the challenges of intergenerational wealth. Edited excerpts:
What makes the Sassoon family’s history interesting in today’s times?
The Sassoon family’s rise and decline is very relevant to our times as it gives us a sense of globalisation, which existed even at a time with open borders. The members of the family dealt with every religion, sect and nationality across all the borders and never asked, “Should we deal with X or Y because of his religion or nationality or identity?” They were always guided by this one question, “Can we trust this counterpart?”, because, remember, people did not meet then. They heard of a trader or agent in some place, and they had to do trade with him. I thought this was so important compared to our days now, where the first thing we want to know is where that person is from. There was also freedom of travelling anywhere; no one had a passport. All you took with you was a letter of recommendation.
The family’s story too is fascinating because it’s connected to the British empire, colonialism, and plays an important part in the India story—how India took people like David Sassoon, who fled their country. Sassoon, in fact, felt very much at home in Mumbai, and he really wanted to see his family stay there. His will dictated that his house and office would not be sold for 51 years...
The story in the book centres on five family members. How did you select them?
I decided to focus on people who made a major impact from a business point of view.... I mainly focused on the founder, David Sassoon, his two eldest sons—Abdallah (Albert) and Elias, Farah (Flora, who married her step-uncle) and Victor (Elias’ grandson). Abdallah, who was named as the heir to lead the family business, took care of David Sassoon and Co., and Elias, who handled the business in China, created ED Sassoon (the business split because Elias was upset that Abdallah had been named heir).
I decided to write more about Flora as no one gave her her due in any previous writings on the family. Everyone said she just took over the business from her husband (Solomon). Well, yes, she did, but she ran the global business successfully for six years. The next natural character to focus on was Victor Sassoon, because he presided over the ED Sassoon business for the last 25 years, before all their assets in China were nationalised in 1949.
What set Farah apart?
Three years before her husband died, he had been complaining about work pressure. She announced that she would come with him to office three days a week. Now, unlike many marriages in that time, this was more of a love story; it wasn’t an arranged marriage. It seems to me she was very assertive and told him she was going to help.
For him, it was very awkward because only men visited the office, and then there was the custom of handshaking at the end.... But she ploughed in, sat there and listened to all the conversations, negotiations, etc. It was like she had three years of training. So when her husband died, Flora knew everything about the business—all the deals, agents, merchants, routes, the problems—and decided to run it. Her biggest ally was her uncle, Abdallah Sassoon, who knew she was capable.
Most Sassoon men were living in London at the time. No one wanted to drop their luxurious life and come back. But they weren’t happy with her taking over.... And the more successful she was, the angrier they became. Eventually, they conspired against her and pushed her out.
You mentioned Victor Sassoon. How did he take the loss of the business?
Well, times had changed when he took over. Politically, it was clear by the 1920s that the national movement in India was growing very strong. Britain was not the same empire as it was at the end of the 19th century. The opium trade had died and the cotton mills had weakened dramatically. Industrialisation was on the rise.
Victor Sassoon was not an industrialist; he was attracted by real estate. He made his bets there and it worked very well between 1926-37 in Shanghai, where prices of real estate had tripled in one decade. What he didn’t anticipate was the turbulence that was going to sweep the world, first with the invasion of Shanghai by the Japanese in 1937, and second, World War II, which led to the Japanese occupation of Hong Kong and Shanghai. There was total destruction by the end of the war in 1945. Then the communists took over and nationalised everything.
So, the end really for the Sassoons in China began in 1937. In fact, he started regretting leaving India and betting on China.
The Sassoons were big on charity, why didn’t they form a trust like the Tatas did?
Yes, an interesting aspect of their business was that every transaction, without an exception, whether profitable or not, was taxed internally by a quarter of 1% for charity. It was remarkable. However, the charity was done in a haphazard way. I think one of the main weaknesses in the decline of the family name was that they never set up a proper (philanthropic) trust.
The only person who wanted to rationalise and make the business almost like a modern corporation was Flora. She wanted to streamline how decisions are made, how philanthropy should be invested so that there is a bigger amount to gift, on foreign exchange, etc. But the rest of the family members didn’t want it. They were scared of change.
What is the takeaway from this book?
Intergenerational wealth is always complicated. How do you translate the same entrepreneurial drive to the next generation? What is the balance between having wealth and yet wanting to work hard? David Sassoon never had the money to splurge initially, like his grandchildren did. During my research of their archives in London, I found a bill of 13,000 pounds for food for a month in 1929-30. That’s roughly 150,000 pounds in today’s price. The amount of money they spent was really out of proportion.
Then there are issues of governance that a family business must keep in mind. And finally, family businesses need to realise sibling competition is normal...